Healthcare

It’s time to scrap certificate of need in Maine

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Members of Maine’s Health Coverage, Insurance and Financial Services Committee will hold public hearings Tuesday on a number of bills that would repeal or reform Maine’s Certificate of Need (CON) laws, which require healthcare facilities to obtain permission from the state and their competitors before offering certain services or expanding their existing capacity. The bills are sponsored by Rep. Laurel Libby of Auburn.

Last spring, Mainers began to understand the value of sufficient hospital and nursing home bed capacity. Preserving this was the original goal of the state’s pandemic response, and to “flatten the curve.” Thankfully, we never faced the worst-case scenario: a stressed and severely rationed healthcare system. 

If our hospitals or ICUs had been overwhelmed last May, or even this January, reforming CON would be even more urgent. I have little doubt that Governor Mills would have issued a swift order to remove this roadblock and suspend CON altogether had the situation reached that dreadful level.

Instead, the governor allowed the Division of Licensing to implement an expedited CON process. This allowed 11 applications to sail through, each within a week, instead of the usual 3 to 4 months.

A study by the Mercatus Center published last July showed that CON reform leads to more satisfaction and access to care, especially in rural areas. Researchers found, both before and after controlling for social risk factors such as race, education and poverty status, that in counties with CON laws, “healthcare expenses per Medicare beneficiary are higher, as are utilization rates of ambulance services, emergency departments, and readmissions.”

Mercatus researchers in 2016 also found that hospitals in non-CON states have significantly lower mortality rates for pneumonia, heart failure, and heart attack. These hospitals also have lower readmission rates for heart failure and heart attack, plus their patients are more likely to report a pleasant hospital experience.

No health organization should have to appeal to the state and their competitors to simply return their bed capacity to the approved level under their previously accepted CON application. This is unnecessary time, money, and focus diverted from the administration of crucial health care services to Mainers who desperately need it. 

The fact is, if hospitals thought increasing prices for any reason would make them more money, they would do it—with or without a CON. They don’t need to build out extra beds or services in order to rationalize it. 

CON allows established providers to hide behind this faulty logic and use state regulation to protect their position in the industry. It ultimately restricts competition, care capacity and options for consumers.

The Federal Trade Commission and the Antitrust Division of The Department of Justice agreed in a 2016 statement, noting that “CON laws raise considerable competitive concerns and generally do not appear to have achieved their intended benefits for health care consumers.”

A 2013 Maine Policy analysis compared the 10 states with the fewest hospital beds per 1,000 residents to the 10 states with the most. The report found that the expense per inpatient day is $878 more expensive in states with fewer hospital beds. CON ultimately restricts the supply of hospital beds, raising costs on providers, and ultimately consumers.

Inertia is a strong force in public policy, but we must not let it get in the way of common sense reform. The status quo should never hold the benefit of the doubt.

If a policy does not serve its intended purpose—or if it does, but its effects are counterproductive to its stated goals—it must be repealed. The burden of proof must be on those who support more restrictions, not fewer. Certificate of Need meets these dubious metrics. It must go.

In the shadow of a year-long public health and public policy crisis, it’s time for Maine to finally scrap this outdated, anti-competitive law.

About Nick Murray

Nick Murray, of Cornish, currently serves as Policy Analyst with Maine Policy Institute, writing, researching, and bringing Mainers together over the issues facing the state. Previously, he served as Outreach Coordinator, planning events to spread the word about Maine Policy's work to new audiences around Maine.

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